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Things are going on in the Comcast/Astros/Rockets involuntary bankruptcy case today, as this is the official start to the judge hearing the case. Both sides are laying out their arguments, detailed in briefs that have leaked out over the past few weeks, while David Barron is on the scene letting us know what is going on.
We will continue to update this story with more tweets/information from Barron, but if you have the time, check out his excellent feature from this weekend on what went wrong with the network. It's a great, great overview of the situation and worth a bit of your Monday time.
At CSN Houston bankruptcy hearing. At least 15 lawyers in front of the bar and maybe 20 in the audience. Astonishing.
— David Barron (@dfbarron) October 28, 2013
If you paid DirectTV the combined hourly legal fees per hour being spent here over two days, it might be enough to cover CSNH carriage fees.
— David Barron (@dfbarron) October 28, 2013
Astros attorney arguing that Comcast affiliates do not meet requirements to force Ch. 11 and filing was in bad faith.
— David Barron (@dfbarron) October 28, 2013
He says Astros agreement w/Comcast was like pre-nup. Partnership hasn't worked, and Astros want out.
— David Barron (@dfbarron) October 28, 2013
Astros oppose Rockets' one-week delay as "sword of Damocles" to force them to accept Comcast demands.
— David Barron (@dfbarron) October 28, 2013
Astros say even current offer by DirecTV won't be enough to make network profitable.
— David Barron (@dfbarron) October 28, 2013
Comcast attorney says original hope for CSNH profit "simply isn't attainable. ... It will not be as profitable as all parties had hoped."
— David Barron (@dfbarron) October 28, 2013
Comcast, though, says it had offer from carrier that could be "domino effect" to lead to more "modest" profit, but Astros balked.
— David Barron (@dfbarron) October 28, 2013
Comcast attorney says CSN Houston now owes Astros $18 million in unpaid rights fees.
— David Barron (@dfbarron) October 28, 2013
We just wrapped up opening statements in CSN Houston hearing. Witnesses will start shortly after 11 a.m.
— David Barron (@dfbarron) October 28, 2013
Rockets now say they are joining Comcast entities as petitioning creditors. Major break with Astros.
— David Barron (@dfbarron) October 28, 2013
CSN Houston studio landlord at Green Street complex also joining as petitioning creditor. Astros say Rockets' move as creditor is improper.
— David Barron (@dfbarron) October 28, 2013
Astros owner Jim Crane called as first witness.
— David Barron (@dfbarron) October 28, 2013
@dfbarron Astros in a serious pickle. They're asking over market value. RSN deals are not all equal.
— Maury Brown (@BizballMaury) October 28, 2013
Crane says Astros' share of network when he bought team was $326 million. Total net valued at $700 million in 2010.
— David Barron (@dfbarron) October 28, 2013
Crane says Comcast never offered anything "remotely close" to $150 mil in revenue needed for CSNH to make money.
— David Barron (@dfbarron) October 28, 2013
Comcast had most favored nation status, so it would have paid less for CSNH sub fees had DirecTV deal gone through, Crane says.
— David Barron (@dfbarron) October 28, 2013
That would have cost CSNH even more money, Crane says.
— David Barron (@dfbarron) October 28, 2013
Crane says Astros opposed May 10 distribution offer by unnamed provider because it would have not made CSNH profitable by itself.
— David Barron (@dfbarron) October 28, 2013
Comcast says offer might have had domino effect on other carriers, but Crane says net was on path to lose up to $200 mil.
— David Barron (@dfbarron) October 28, 2013
And we're back after a recess for lunch and things. Barron and Crane come out swinging, too, with this mildly shocking reveal.
Jim Crane says on stand he called Chase Carey at Fox early this year to ask about returning Astros games to FSN.
— David Barron (@dfbarron) October 28, 2013
Judge Isgur now asking how he would restructure business with or without Comcast involvement.
— David Barron (@dfbarron) October 28, 2013
Crane, asked how quickly he could reorganize: "I’m in the overnight business. … In 30 days I would have a feel of what could be done."
— David Barron (@dfbarron) October 28, 2013
Former Rockets and Astros executive George Postolos will be second witness.
— David Barron (@dfbarron) October 28, 2013
Judge Isgur on length of hearing: "I told my wife not to expect me home tonight."
— David Barron (@dfbarron) October 28, 2013
Postolos says media rights for MLB teams should account for 30 percent to 40 percent of revenue. CSN deal as planned fell in that range.
— David Barron (@dfbarron) October 28, 2013
Astros rights deal was scheduled to increase by 3.5 percent per year over 20-year deal, Postolos says,
— David Barron (@dfbarron) October 28, 2013
Postolos: McLane adviser Steve Greenberg, told Astros bidders CSN would grow enough in value to pay for team and network share by 2020.
— David Barron (@dfbarron) October 28, 2013